What is the main message of The AI Economy?

The main message of The AI Economy is the impact of artificial intelligence on the economy and society.

How long does it take to read The AI Economy?

The reading time for The AI Economy varies depending on the reader's speed. The Blinkist summary can be read in just 15 minutes.

Who is the author of The AI Economy?

The author of The AI Economy is Roger Bootle.

Economics

The AI Economy Book Summary - The AI Economy Book explained in key points

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The AI Economy summary

Name: The AI Economy
Rating: 4 (241 reviews)
Author: Roger Bootle

Roger Bootle

Work, Wealth and Welfare in the Robot Age

4 (241 ratings)

22 mins

Brief summary

'The AI Economy' by Roger Bootle explores the impact of artificial intelligence on the economy. It examines how AI will shape industries and transform the way we work, live, and interact. The book offers insights into policy implications and strategies for success in the age of automation.

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International Economics Wealth Artificial Intelligence

Table of Contents

The AI Economy
Summary of 7 key ideas

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Key idea 1 of 7

What’s in it for me? Get ready for the AI revolution.

Of all recent technological advances, Artificial Intelligence is surely the area with the greatest hype and speculation. If you believe AI enthusiasts like futurist Ray Kurzweil, smart machines will have surpassed human brains by the year 2025 – and be smarter than all human brains combined by 2050. From this point on, which Kurzweil calls the Singularity, it would seem to be only a matter of a few years until machines replace humans completely, taking over even the most complex tasks and jobs.

No wonder the advance of robots and AI is a huge cause of concern for businesses, individuals and governments! According to a 2015 survey by Chapman University, Americans fear robots replacing them more than they fear death.

But how likely is this dystopian vision of the AI revolution really? Will AI really spell the end of all work, maybe even the end of humanity? In these blinks, we’ll tackle some of our biggest questions, hopes and concerns surrounding the age of AI from a pragmatic perspective. Considering the history and macroeconomics of technological innovation, you will learn more about the impact AI is likely to really have on your life.

In these blinks, you will learn

which jobs are most likely to be replaced by robots;
which new industries and investment opportunities could arise; and
why education is the most important factor in preparing for the robot age.

The spread of robots and AI will lead to a fourth industrial revolution similar to the ones we experienced before.

How can we predict the future of the global economy? Well, in order to understand the present and speculate on what’s next, we might look to the past for answers.

For economists, the most significant historical process to study is the Industrial Revolution. But according to American economist Robert Gordon, there has not just been one but three separate industrial revolutions. The first was the process of technological innovation, social and political change, which began in Great Britain in the late eighteenth century with the invention of steam engines and railroads.

The second one began at the end of the nineteenth century, with the invention of electricity, combustion engines and telephones. The third one happened in the 1960s, after the invention of the computer. And now, with the technological advancements of robots and AI, we are about to enter a fourth industrial revolution.

However, AI and robotics have been so overhyped that it's tempting to think that they will usher in a much more radical transformation of the world, rather than "just" another industrial revolution. Now, it’s true that robots and AI have made significant strides in recent years – in processing power, algorithmic decision-making and text and image recognition. In 2016, for example, Google’s DeepMind AI beat the reigning human champion of Go, a complicated Chinese board game.

But even here, progress has been limited. For example, Google recently tried to train AI to recognize images of cats on YouTube with much less success: it took the power of 16,000 computers to identify a single one. And then there are still plenty of skills, including creative thinking, emotional intelligence and manual dexterity, that robots and AI have difficulty mastering, and there is no obvious solution in sight. So despite what AI enthusiasts promise, there is little reason to believe that machines will replace humans in all but a very specific set of jobs in the near future.

So what can we expect from the fourth industrial revolution of robots and AI? Well, even though the previous revolutions did not lead to an immediate improvement in living conditions for workers, over time their wages and quality of life increased. In the year 2000, the global per capita GDP was over thirty times more than it was in 1800. Similarly, the AI revolution might be more of a process than a single, dramatic event. But if it follows the same pattern, it will boost productivity and economic growth, making everyone better off in the long run.

While some “robotic” human jobs will be lost to machines, new jobs will rise to take their place.

The robots are coming to take our jobs! That’s one of the main fears surrounding the rise of AI – but it’s largely unfounded. The McKinsey Institute estimates that, in richer countries, only 14 percent of jobs are “highly automatable,” while only 5 percent of jobs are “entirely automatable.” This does not warrant dystopian visions of mass unemployment. But it still means that, by 2030, 375 to 700 million jobs could be made redundant by robots.

Some of the jobs likely to disappear are cashiers, grocery baggers, check-in assistants and other repetitive, low-skill work. Even routine legal work, accounting, analyzing and simple translation jobs can now be done by AI.

As productivity increases, human workers will be able to choose more leisure time over more work.

According to the Deloitte’s Shift Index, 80 percent of people hate their jobs. Yet the average adult today spends most of their life in full-time employment, working around 30 to 40 hours a week. And many office workers, lawyers and bankers work even more than that. If we hate our jobs, why do we still work so much?

The answer is not so straightforward. Beyond just paying the bills, a job is for many people a source of value and purpose. And, while work can be a source of stress, unemployment can be an even greater source of angst. Moreover, society values economic success, and rewards people’s competitive streak. And as inequality widens, people on the lower side of the income spectrum need to work more to make ends meet.

If the cost of labor sinks, economic inequality between people and nations will rise.

In recent years, many economists have remarked upon a disturbing trend. Since the 1960s, income inequality in Western nations has been on the rise. Back then, the GDP of people in the bottom quintile of the income spectrum grew by 5.5 percent each year, while the GDP of the top quintile grew by only 2 percent. But in 2014, the annual growth rate of the GDP was 53 percent for those at the top, and only 14 percent for those at the bottom. The gap between rich and poor is widening at an alarming rate.

Will this trend continue under the AI economy?

Governments need to devise clear laws and regulations to fight inequality and promote a sustainable AI economy.

Now that we’ve considered some of the risks and benefits of the AI revolution, we are left with the important question of policy and regulation. Should governments promote the spread of AI, or should they try to deter it?

The answer is neither. There is a strong case to be made that the AI revolution will not be as damaging to the economy as many people think. Accordingly, there is no need to stifle research and investment in the field, unless it has a clearly malignant purpose, such as the development of autonomous weapons. Governments should also steer clear of a “robot tax,” meaning they shouldn’t charge businesses an additional tax for using new robot and AI technology in their manufacturing processes.

We must reform the education system to prepare people for the AI economy.

Even if you suspend the thought of the impending AI revolution for a second, you might agree that much of our current education system is outdated, both in content and in form. What we teach our kids and how we teach it doesn’t reflect the demands of modern society. That’s why we have to radically transform the education system if we want to help people live good, self-determined and productive lives in the new AI economy.

Which subjects should the new education system focus on? For AI enthusiasts, the answer is clear: STEM subjects – Science, Technology, Engineering and Mathematics. But it’s not clear why everyone in the robot age must know how a robot works, or how to build one themselves.

The AI revolution could be a net positive, leading to higher productivity, a flourishing economy and a better quality of life.

In the previous blinks, we’ve addressed some of the reasons why popular opinion about the AI revolution might be overly pessimistic. It seems that, after all, the rise of robots and AI won’t be that different from other technological change in the past. Not only is it unlikely that the AI revolution will cause massive job loss, it will spell good news for economic growth overall.

As we’ve seen, robots and AI will boost economic productivity by helping humans do their work more quickly and efficiently. New technologies such as self-driving electric vehicles are also likely to lead to a surge of investment that will keep overall demand strong. A steady rise in investment and demand could mean that interest rates and bond yields climb to a level as high as they were before the Global Financial Crisis. Industries who deal in human services and reflect our need for more high-quality free time, such as health care and leisure, will boom. For example, we are likely to see a rise in people offering and making use of personal coaching sessions to improve their bodies, mental health or relationships.

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What is The AI Economy about?

The AI Economy tackles the most pressing economic questions surrounding the rise of Artificial Intelligence. How will the development and spread of smart machines’ age affect our jobs, wages and work hours? How will it impact investment, interest rates and inequality? Acclaimed economist Roger Bootle applies his knowledge of history, technology and macroeconomics to investigate how the fourth industrial revolution will transform the global economy.

The AI Economy Review

The AI Economy (2019) is a thought-provoking exploration of how artificial intelligence is shaping our world and economy. Here's why this book stands out:

By presenting compelling evidence and real-life examples, it offers a comprehensive analysis of the impact AI has on various industries and job markets.
Through insightful discussions on the future of work and automation, it offers valuable insights for business leaders and individuals navigating the evolving economy.
With its accessible language and engaging narrative, it manages to present complex concepts in a way that captivates readers, ensuring that the topic never becomes dull.

Who should read The AI Economy?

Business owners and investors who want to make the most of the new economy
Government officials and policymakers who want to help people thrive in the robot age
Individuals who wish to prepare themselves for the AI revolution

About the Author

Roger Bootle is a British economist and columnist for The Daily Telegraph. He founded the macroeconomic research consultancy Capital Economics and has written multiple influential economy books, among them The Death of Inflation (1998) and The Trouble with Europe (2014).

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